A good part of the reason I started blogging was because I went to a history conference at a UT branch up between Dallas and Fort Worth and found that, contrary to belief, many well known academic historians have found community history projects to be invaluable because of their focus and details. Photos rated high. Photos with details rate high. Interviews with participants in events rated high. Interviews with older people rated high if you cover their experience and perspective.

A Fifty Cent Lighter & A Whiskey Buzz - This site is just a way for me to have a little fun and share a little music. I’ll highlight some of my favorite artists that I play on the radio and try to expound upon their music in ways I can’t always do on the air. (RSS)

Comment from Doc (and see the main post as well) on a tremendous accomplishment in Wisconsin. Good for them, and best of luck on the recall.

The president turned down the existing Keystone XL proposal, so it will at least be delayed. (Also, Robert J. Samuelson: Still a dumbass.) But Canada’s wingnut PM isn’t giving up on it. Meanwhile, fracking is wreaking havoc in communities unfortunate enough to be on top of big shale deposits. And it’s happening in part because short-sighted term limit laws help to make sure it’s only the lobbyists - and not the legislators - who know how government works.

Term limits are one of those conservative agenda items masquerading as reform. A balanced budget amendment is another. The goal is to cripple, constrain, shrink, stupefy and impoverish governments to the point that they provide no useful service, at which point the public gives up expecting anything and the dystopian laissez-faire project can proceed with a minimum of friction. Twenty years ago, when I was much more gullible, I was a big fan of these bad government initiatives.

It’s kind of funny that the nominally liberal Think Progress would post something like this, wherein the good old US of A is rescuing stranded Iranian sailors and those ungrateful Persians respond by being mean. Maybe the US-led sanctions have them feeling less than warmly toward America? Or maybe the string of assassinations of their scientists has them feeling a little jumpy and suspicious? It’s a Fox News-worthy presentation; no context, no complexity, just catapulted propaganda.

Atrios pointed to this report that the Attorney General worked at the law firm which gave the legal go-ahead for MERS. MERS, potentially the most fraudulent actor in a story stuffed to bursting with fraud. Cynthia Kouril calls it a bombshell and writes:

Even if Holder and Breuer are not planning to return to Covington after their stint in public service, their pensions are presumable tied to the viability of the firm. This isn’t a “did you work on this particular matter” kind of conflict of interest, this is more existential.

I know I quote Charlie Pierce a lot, but seriously is there anyone else out there who can put together a paragraph like this?

And come on now, John King: First you throw out that first question down here on Thursday night and then, when the adulterous hypocrite responds the way everyone on the planet knew he would respond, you stand there like a cigar-store Indian without standing up a quarter-inch for your profession until David Gergen stands up for you two hours later. Of course, having David Gergen stand up for you is rather like building your seawall out of Maypo, and, anyway this isn’t the kind of high-and-mighty dudgeon that we should have to take from a staff-banging megalomaniac who has spent his career saying things about his political opponents that weren’t merely “close to despicable.” They were the very living, breathing definition of it.

Also, did any other analysis of that debate go where Pierce did in the part that concludes: “This was an argument that Santorum is uniquely situated to make, and he made a strong case of it”? He’s more than a great stylist.

Putting banks into receivership, and reprivatizing them down the road, is actually a well-established practice, but the FDIC can usually find takers for their assets and deposits on a short timetable, so these interventions do not raise complex procedural or political issues. Even though history shows this approach is the fastest path out of a financial crisis, it was clearly off the table as far as large financial players were concerned. Instead, another of the four measures, the so-called public private investment partnerships (PPIP), billed as a way to remove toxic assets from bank balance sheets, was clearly a back-door subsidy.

Another move taken during this period was the relaxation of “fair value” accounting rules. That gave the banks considerable latitude in valuing supposedly illiquid securities, in effect enabling them to not mark them down. The big problem here was the bogus “illiquidity” claim, oft repeated in the media as gospel. It wasn’t that the vast majority of the toxic assets weren’t trading; investors like hedge fund manager John Paulson said there was “plenty of liquidity,” even in “opaque areas.” The real impediment was that banks were carrying these positions at prices well above the bid in the marketplace. Claiming “illiquidity” was a pretext for banks to maintain fictitious valuations and thus avoid recognizing losses.

The effect of this change was that it represented a form of what is called regulatory forbearance, which is a fancy way of saying the regulators give waivers for known problems on the assumption that now is not the time to impose tough requirements. Holding banks to their normal capital requirements, which the now-phony accounting finessed, allowed them to pretend they were in better shape than they really were, and thus raise less equity.

But this sort of move was the polar opposite of what history had shown to be the best approach. An IMF study of 124 banking crises concluded:

Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.

As the stress tests moved forward, it quickly became clear that they were an exercise in form over substance. Ben Bernanke had remarked that the fall in bank stock prices was “detached from real US economic fundamentals.” No one had a problem with “detachment” from sanity when lenders were on a risk bender charging way too little for the possible downside, with the result that asset prices, ranging from houses to commercial property to corporate takeovers (which helped boost equity markets) were inflated as a result. Recall that in the late 1990s Greenspan had gone from worrying about “irrational exuberance” to becoming a stock market tout.